What is a sinking fund? It is a saving account that you establish for a specific purpose. We are a mere 7 weeks from the December holidays and if you have your eye on a computer or flat screen TV, now is the time to start saving. The average laptop computer costs around $700. If that is on someone’s wish list and you’re paid twice a month, you will need to save $50 per paycheck for the computer. If your dream is a flat screen TV, I have seen prices for large ones as low as $500, so we are talking about saving just $35 per paycheck for that purchase.
These items certainly make our lives easier and more enjoyable, but are not worth going into debt over. Determine the cost, make, and model of that “want” item on your list and start your sinking fund now.